To quote Bollywood, Ganda Hai Par Dhanda Hai ye. And for the Mukesh Ambani led Reliance group, the Coronavirus pandemic ushered in rather ugly times. On a very rough March Monday, Mukesh Ambani lost a $5.6 billion on the back of severe decline in Reliance Industries’ share price all in day’s doing. Ambani was witnessing what many of his contemporaries have had to suffer – an economic crisis of sorts. The Reliance economic fallout was attributed to the sudden decline of crude oil prices by 31%, given the developing price war between Saudi Arabia and Russia.
The situation reportedly saw a aggravation post a weak consumer sentiment given a steady rise in Coronavirus cases in India and around the world. According to a Forbes Billionaires list assessment, at $42.2 billion on March 9, 2020, Ambanis worth had dropped 11.6 per cent or $5.6 billion lower than his initial capital. The drop in the economic status of Ambani signalled the second biggest loss after Mark Zuckerberg’s Facebook.
With growing number of people shelving travel plans, oil prices have hit rock bottom a first in several years. This affected share price of Reliance Industries, Ambani’s oil-to-telecom conglomerate running the biggest global refining complex in Jamnagar, Gujarat.
In its worst fall in 12 years, the Reliance Industries saw the scrip close 12.35 per cent lower at Rs 1113.15, after reaching a low of Rs 1,094.95. Its market capitalisation dipped to Rs 7.06 crore, which was once the most valuable company to Tata Consultancy Services (TCS), having a market cap of Rs 7.40 lakh crore.
Russia it is reported did not support the 1.5 million daily barrels production cut proposed by Organisation of Petroleum Exporting Countries (OPEC). But like they say a stitch in tie saves nine.
In what is being called the biggest deal in the tech sector, Facebook forging an alliance with Reliance Industries chief Mukesh Ambani has pushed the capital of the company up turning the Reliance making Ambani the richest person in Asia. Ambani interestingly zipped past Alibaba founder Jack Ma. A latest Bloomberg Billionaires Index assessment shows, Mukesh Ambani’s wealth has increased by $ 4.7 billion to $ 49.2 billion.
Globally Ambani has cemented his place as the 17th richest around the world. Jack Ma is 19th in the index. Amazon founder Jeff Bezos is still at number one with $ 14,300 million.
Social networking giant, Facebook signed an investment of $ 5.7 billion buying a 9.99 per cent stake in Reliance Industries group company Jio Platforms Ltd. With the massive deal, Relaince sawits shares rise by 10%. For Ambani this is a golden opportunity for his group to fulfil the larger dream of the Prime Minister to ensure a Digital India.
Having captured the market with offers way ahead of its competitors and seamless surfing the partnership promises to leverage the combined power of Jio’s world-class digital connectivity platform and Facebook’s relationships with the Indian people to foster newage innovation. The direct beneficiaries of this coming together will be Jio Mart and Jio’s new digital business platform with WhatsApp. An estimated three crore shopkeepers are slated to gain. This will provide quick and good digital transaction platform to both shoppers and customers.
At the same time, Ambani said, ‘Our companies will together accelerate the digital economy of India, so that you can be enabled and make you prosperous. Our partnership is to make India the world’s leading digital society. ‘
For Ambani it has been a bad year. Recently, RIL shares fell drastically and the stock went down. In fulsome praise ‘Bravo Mukesh,’ said Anand Mahindra after the RIL-Facebook deal went through, calling it sign of India’s economic importance.
Facebook said, “This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country. Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India.”